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QQQ ETF Weakness Could Be Sign of Market Top

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QQQ ETF was the  leading ETF in the current 2nd longest bull market of US history and technology sector was playing strong rule for the market current strong trend. However, recent days QQQ ETF showed its weakness while market was trying to hit its all-time high. Especially Dow jones index was above 18000 points and s&p 500 was above 2100 points. Last weak market shows little weakness because of QQQ holdings tech giants’ weakness in the earnings and tech giants companies like Microsoft, apple, google all are down this month because of earnings miss except Amazon. These 3 loser companies weight are 30 percent of QQQ  total holdings. These companies also the biggest companies in accordance to the market capitalization and also the heavy weighted companies in other indexes like dow jones index and S&P 5oo companies.

QQQ ETF is still down more than 3 % while dow jones and s&p 500 is up 4% and 3 % consecutively  up to the date of 2016. QQQ chart shows that ETF was in the triangle pattern and broke down to the down side.  Now we have to watch how etf handles its current $105 price level. Even if ETF is successful to handles its current price level, there is low possibility ETF will be on the strong uptrend in the next few days. Appll 29 2016, ETF had a lot trading volume and QQQ ETF failed to close above  the opening price. ETF last few days movement with high trading activity supports etf is more prone to down side and Continually will move to the downside  at the sign of market weakness and Etf has very low investors confidence like apple stock.

QQQ ETF
QQQ ETF

QQQ  is currently  holding below the lower band of Bollinger. This should be a strong buy signal for ETF. However,  we did not see any divergence  in MACD. Rather ETF signals a room for further move down  if market shows further weakness.

Even though market make one of the strong bullish move from February to early April 2016, this market upward trend has some weakness.  Market was moving higher by S&P 500 and dow jones index, volume  was low all across the board. This means even though stock trader participated in the current move, they were participated cautiously in the market. This is a warning sign for the current market uptrend.

Second market weakness comes in after the leading stock shows its weakness in the market. In the current market, we see all the three leading stocks in the current market according to the market capitalization missed earnings in the April. Market leader stock apple looks weakest among the 3 weak stock.  Apple stock is down 10 percent   from the 2015 close and struggling hard to get its major support line at $92. This is price where apple got support at august 24 2015(A major stock market crash day) and 2016’s stock market correction. Apple stock  failure to get support at 92 would be drastic for apple stock as  we do not see any major support level before $ 82 and $ 71.

 

Google stock is down 6.5%, Microsoft is also down  8 %.  Google  Stock still looks good and  stock has good support level at 670. Now we have to watch how stock would perform at this level . Google failure hold this level will be another  bad signal for the market.

 

Microsoft stock is down 8 % percent while dow jones is up 4 %  and S&P 500 is up 3 percent. Microsoft currently is in the major support line and failure to stay above the support line or holding the support line could initiate a big down fall for the stock  market.  Microsoft is currenly below the all major simple moving averages including 100 day and 200 day simple moving averages. Last week stock failure to hold above 200 day moving average is a big concern for the stock.

 

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